The events surrounding the owners of YUKOS and the rapid growth of stock prices that preceded them forced the investment bank Brunswick UBS to lower its assessment of the Russian stock market from "positive" to "neutral". Most experts agree with Brunswick and expect growth to resume only by the end of the year.

Brunswick UBS has downgraded its overall stock market assessment from "positive" to "neutral." "The growth potential on the stock market has largely been exhausted, and the market prices of most companies are close to their fair value," explains the company's co-CEO Denis Rodionov. He adds to this the increased political uncertainty on the market in connection with the events surrounding the YUKOS company. "Unlike fundamental indicators, political risks are difficult to assess," says Rodionov. As a result, Brunswick clients have been advised to reduce their investments in Russia to the level of other developing countries.

"We recommended reducing positions when many still believed in growth, so we are pleased that Brunswick finds our market assessment fair," comments on the decision of colleagues senior analyst of NIKoil Alexey Kazakov. The scandal around YUKOS, according to him, made people think about a possible revision of the results of privatization. "This is a mine in the foundation of corporate construction, which is unclear whether it will explode or not," Kazakov believes.

Senior analyst at Troika Dialog Evgeny Gavrilenkov believes that during the period of rapid growth, many simply forgot about the political component, although no fundamental changes have occurred in this matter. The economist also considers the reserved assessments regarding the market's prospects to be justified, since it should develop at a pace comparable to the economy. "We assessed the market's potential neutrally a month and a half ago," recalls Renaissance Capital analyst Ekaterina Malofeeva.

Analysts expect the situation with YUKOS to be resolved soon. "I think the conflict will soon be resolved," says Kazakov from NIKoil. "It should be resolved in favor of market forces," says Gavrilenkov. However, because of it, investors will assess the risks more soberly, which will lead to a decrease in quotes, the economist adds.

Malofeeva from Renaissance Capital hopes for market consolidation and a halt to the decline. According to her, the reason for the correction is political and corporate news, not fundamental factors. Those who did not dare to do so when the market was growing are currently closing their positions, says Malofeeva.

However, her colleagues are more pessimistic. Gavrilenkov estimates the minimum level to which the market may roll back at 350-370 points of the RTS index. "At such values, market capitalization will be comparable to the money supply," he explains. He considers the 400 point mark, at which the decline will stop, to be more likely. Kazakov from NIKoil gives the same forecast.

According to Kazakov, the decline will give way to growth towards the end of the year - "companies' indicators will be no worse than last year. In addition, free liquidity will make itself felt." His forecast is as follows: the RTS index will reach 520 points by the end of the year, but growth will be calmer.

Brunswick is also prepared for such a development. "If the companies' financial results are better than forecasts or the market capitalization decreases, then we are ready to revise our forecast," Rodionov assures.

Brunswick overestimated Russia